Taxation to encourage investments and renewal

31.5.2018, 10:43

Maintaining welfare in Finland requires policies that support companies' abilities to improve their competitiveness. Companies must be encouraged in investments, innovations, employment, and ownership in Finland.

All taxation must support these goals. Industry should not be burdened with any more cost-related easements.

The biggest problems of our tax system include double taxation of companies' profits, inflexibility of investment depreciation allowances, taxation on generation changes, and tight progressive taxation on employment income.

A big concern are companies' investments that for the member companies of The Federation of Finnish Technology Industries are up to 2 billion euros lower than in 2008. The growth of Finland's economy and tax revenues require increased investments. Companies and owners have no real tax-related incentive to make long-term investments in their own country.

The corporate tax system should be updated so that a company rewards its employees first, after which the company takes care of its operational preconditions for the future, and only then is it the state's turn to receive its share. This means that taxes are collected only after the revenue is paid out of the company. This will encourage companies to invest and makes them committed. Taxation should therefore encourage entrepreneurship, investments, and work even better than at the moment.

Finland's tight tax rates and the high level of many taxes and tax-like fees weaken companies' employment abilities and takes work away from Finland.

While the corporate tax system is being reformed, the companies' changes of generation must be made easier. In situations where a generation change occurs, the entrepreneur must often pay the taxes from his or her own company, which significantly decreases a new entrepreneur's chances to make investments.